GameStop CEO Ryan Cohen faced intense questioning during a CNBC interview regarding his company's unsolicited $56 billion proposal to acquire eBay. The exchange left financial anchors visibly perplexed as Cohen struggled to explain the funding source for the massive deal.
According to pcgamer.com, Cohen—often referred to as the 'meme stock king'—claimed eBay could become a much larger business through the application of an "entrepreneurial mindset." His stated plan, according to a GameStop press release, involves cutting $2 billion from eBay's budget within a single year.
During the broadcast, CNBC's Andrew Ross Sorkin pressed Cohen on how GameStop could afford the $$56 billion price tag when the company lacks sufficient capital. Cohen directed the interviewer to the company's press release, which states the acquisition would be funded via 50% stock and 50% cash.
Sorkin calculated that GameStop's market capitalization, cash reserves, and expected financing from TD Securities still left a $16 billion deficit relative to the $56 billion offer. Cohen responded to the discrepancy by stating, "Yeah, well we'll see what happens."
Co-anchor Becky Quick expressed confusion over the lack of a clear financial roadmap, telling Cohen, "Ryan, that's a pretty straightforward question. I don't get it. Where's the rest of the money come from?"
Cohen claimed he did not understand the interviewers' questions and suggested that GameStop could simply issue more stock to complete the transaction. The interview ended abruptly when CNBC transitioned to another interviewer.
Following the announcement, GameStop's share price dropped 10%. In a separate press release, eBay confirmed that the proposal was news to the company, stating that today is the first time they have heard of the offer.
eBay officials noted they will "carefully review and consider" the proposal before making further comments.
